News

Australian Offal Exports Rise

23 March 2015

AUSTRALIA - February beef and veal offal exports rose by four per cent year-on-year to 13,259 tonnes, pushed by high slaughter rates across Australia, according to analysts and Meat and Livestock Australia.

International demand remains strong, despite a shift in import policy from Indonesia.

In 2014, Indonesia was Australia’s fourth largest offal export destination, after Korea, Japan and Hong Kong, taking just over 12 per cent of volume.

Indonesia was also the largest destination for heart (5,771 tonnes), tongue root and trimmings (5,494 tonnes) and lips (2,231 tonnes). Tongue (1,754 tonnes) and head meat (1,481 tonnes) were also important exports.

However, following an import ban on all offal items, except halal tongues and tail, at the end of 2014, total offal exports declined 95 per cent year-on-year to 50 tonnes (15 tonnes of tail and 36 tonnes of tongue) in January and 88 per cent year-on-year to 140 tonnes (72 tonnes of tail and 68 tonnes of tongue) in February.

Fortunately, other markets emerged to take product previously destined for Indonesia. Heart shipments to Singapore and the Philippines increased from next to nothing in the second half of 2014 to 202 tonnes and 169 tonnes, respectively, in February.

Similarly, a large portion of tongue root and trimmings was redirected to Singapore while lip shipments to Mexico increased almost five-fold on year-ago levels.

However, while the impact may have been mitigated, fewer buyers in the market has impacted Australian offal prices.

After improving throughout the second half of 2014, offal items, typically destined for Indonesia, mostly eased in January and February.

After averaging A$2.27/kg, in December 2014, halal heart eased to A$1.79/kg in January and to A$1.60/kg in February.

Halal beef lips, in February, followed a similar trend, back four per cent on where they finished 2014, as did halal head meat, back 25 per cent.

Halal tongue root was not widely enough reported to comment on a trend.

While Indonesia has left the market, traditional destinations still continue to demand Australian offal, encouraged further by a depreciating Australian dollar.

Omasum prices continued to trend dearer throughout the first two months of the year, as did thin and thick skirt, tail and tendon.